Instacart IPO Update: Riding the Rollercoaster
Instacart’s initial public offering (IPO) has been nothing short of a rollercoaster ride since its launch. With its stock price fluctuating significantly in a matter of days, this update explores the recent developments and reiterates my cautious stance on this high-flying newcomer. $Instacart, Inc. (Maplebear Inc.)(CART)$
1. A Flying Start
Instacart’s IPO was met with immense enthusiasm as it debuted at the higher end of its price range, at $30 per share. Within just two days of its listing, the stock skyrocketed, hitting a peak of $40 per share.
2. The Soaring Descent
However, what goes up must eventually come down. After its meteoric rise to $40, Instacart’s stock experienced a swift descent. As of the closing price on September 20, 2023, it retreated back to the IPO price of $30 per share, marking a 20% drop from its peak.
3. A Cautious Perspective
As an investor who values fundamentals and exercises caution, my initial view on Instacart remains unwavering. The stock’s rapid ascent and subsequent decline are emblematic of the volatility often associated with IPOs.
4. Hype and Valuation Concerns
One of my primary concerns with Instacart has been the hype surrounding its IPO and the valuation it commanded. While the company operates in a promising space, the grocery delivery market, its valuation seemed to have outpaced its fundamentals.
5. A Target Price Below $20
Given the recent price action and my assessment of the company’s prospects, I would cautiously place my price target for Instacart at less than $20 per share. This target is aligned with my valuation principles and my preference for investing in assets that exhibit a strong balance between price and intrinsic worth.
In conclusion, Instacart’s IPO has indeed been a wild ride, featuring dizzying highs and abrupt lows. While some investors may be enticed by its potential, I continue to exercise prudence and emphasize the importance of diligently assessing a company’s fundamentals and valuation.
As always, my approach to investing is characterized by a commitment to long-term value and a discerning eye for opportunities. While Instacart’s journey has been eventful, I believe in the importance of maintaining a cautious stance, especially in the face of rapidly changing market dynamics.
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I am not a fan of instacart, but at the same time this company is not a joke. Their ad revenue is growing, they acquired some good companies to grow in other revenues
Arm rallies on day one, and collapses on days 2 and 3, the headline becomes "Arm debut isn't a barometer for the IPO market".
Most of the major retailers are already building up their own platforms, so CART is a hard pass for me. It's profitable, but the valuation is too high.
This was a disaster for most , and already a big loser for pre IPO investors the last few years
How many companies besides VFS have a tradeable float that small?